Executive Summary
This paper provides an in-depth analysis into the importance of looking at competitive
advantage and its variables as dynamic as opposed to static especially in the presence of
the supposed new phenomenon of globalization. The aircraft engine industry and its two
largest companies General Electric and Rolls Royce are used to show how competitive
advantage should be obtained and maintained in the presence of globalization. One must
constantly rethink the basic questions that form the base of a firm’s competitive advantage,
that is: What to Produce? Where to Produce? How to Produce? If one can consistently and
optimally reinvent these structures they can remain competitive forever and if not they will
eventually be overrun.
Globalizations Colossal Influence on Competitive Advantage
The corporate world can be conceptualized as a game that cannot be turned off or where
there is no game over. In the corporate world, when you win there is always the chance
that your foe will come back to hurt you. This is why it is imperative to be weary of the
plague of complacency and constantly change the makeup of the company to its most
optimal point. A competitive advantage is when an organization develops or accrues
attributes that allows it to outperform other companies on certain fronts. Companies
usually have a core competence that gives them a competitive edge. For example,
Wal-Marts competitive advantage can be found in its efficient logistics systems which lead
to a low cost position. A competitive advantage cannot be thought of as static but it is
dynamic as even slight changes in the world can change the rules of the game. The effects
of Competitive advantage are magnified by globalization. Globalization is the separation
from place and action or interconnected global markets/production. For example, in the
past it was necessary to go to the store to purchase a product, while now someone sitting
on the couch in Canada can purchase a product from Australia. The companies that can
deviate from normal practices during globalization will find themselves with greater
returns in the future as they will be able to greater exploit the advantages that a more
interconnected world has to offer, such as knowledge sharing and a more diverse customer
base. This positive correlation between globalization and corporate malleability in
increasing returns can be clearly seen in the aircraft engine industry more specifically
within the corporations of GE and Rolls Royce. The aircraft engine industry is
